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Can a local business assign a restrictive covenant to a homeowner's association? And can that covenant be enforced?

Milwaukee, WI |

A local business held temporary easements for construction and permanent restrictive covenants requiring owner-occupancy for the houses surrounding it. A homeowners association was established after the subdivision was settled, and had no rights on the properties. But after the business closed, it assigned the restrictive covenant to the homeowners association (which includes many more homes than are covered by the covenents.)

Additionally, the restrictive covenant included the language that "(businessname) is the only party to benefit from this covenant and no other parties receive any benefit."

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Attorney answers 1


That is a good question. It sounds like the terms of the written covenant exclude transfer from the business. I would argue that this covenant is not enforceable now. Of course, this is one where the document is not crystal clear and people may disagree. It may help to have a real estate attorney look at the actual documents including the covenant and any transfer document from the business to the association.

Any advice given through the Avvo site is for hypothetical purposes only, and does not create an attorney-client relationship. The advice is without warranty and you should not rely on this advice without consulting a Wisconsin attorney directly who knows the particulars of your case.

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